First-time borrowing doesn’t fail because people don’t care — it fails because they don’t understand how real lenders evaluate credit risk, how borrowing costs add up, and how your loan terms can either support or hurt financial health. At Langley, we see young borrowers struggle most with long-term costs, credit utilization, and poorly timed borrowing decisions. The good news? With the right approach and the right tools, you can borrow responsibly and build strong credit without unnecessary cost or stress.

Mistake #1 — Focusing Only on Credit Scores

Borrower belief:

“If my credit score is good, I’ll get the best options.”

Reality:

Lenders evaluate patterns, not just one number — including recent credit use, payment behavior over time, and debt load relative to income. High utilization or recent spikes in balances can outweigh a headline score when making lending decisions.

How Langley helps:

We emphasize credit behavior education, not just score tracking. From our member-focused guidance to digital tools that show you how utilization affects risk, Langley equips borrowers to make decisions that improve lender evaluation — not just surface numbers.

Mistake #2 — Not Understanding Credit Card Borrowing Costs

Credit card interest in the U.S. remains elevated compared with other types of credit. According to Federal Reserve data, the average credit card APR for accounts that are charged interest was about 21.91% in early 2025 — far higher than auto and mortgage debt, which are secured by assets and priced accordingly.

Problem:

High APRs can make carrying a balance costly — especially for first-time borrowers who don’t pay their full statement balance.

How Langley helps:

Langley’s credit cards are designed with competitive interest terms and clear disclosures to help members build credit without surprise cost escalation. While all borrowers should aim to pay in full monthly, Langley’s structure gives you a more predictable cost profile compared with carrying balances on high-APR cards elsewhere.

Learn more about Langley credit cards.

Mistake #3: Letting the Auto Dealer Decide What You Can Afford

What first-time buyers often get wrong:

They walk into a dealership without knowing their true buying power and end up negotiating financing under pressure—often focusing on monthly payments instead of total cost.

How Langley helps:

Langley allows members to get pre-approved for an auto loan before they shop, so they know exactly what they can afford before stepping onto the lot. Many members even walk in with a “check in hand,” which shifts the experience from negotiating financing to simply choosing the right car. This helps avoid overstretching budgets in the moment.

As an added benefit, pairing a Langley auto loan with MyDesign Checking Ride Rebate can help lower the overall cost of borrowing by earning back a portion of interest paid over time.

Explore Langley auto loan options.

Mistake #4 — Underestimating How Student Loans Shape Your Credit Profile

Since federal student loan payment pauses ended, credit reports began reflecting repayment history again, and younger borrowers — especially Gen-Z — are seeing average credit scores tick downward.

Problem:

Ignoring student loan structure (deferments, repayment schedules) can lead to unpredictable credit outcomes later when applying for other loans.

How Langley helps:

Langley’s student loan and student loan refinancing options are designed to help young borrowers manage repayment in ways that align with future borrowing goals. Refinancing can lower monthly cost, consolidate multiple balances, or align payment timing with income cycles — all of which support stronger credit behavior over time.

Learn more about Langley's student loans and refinancing options.

Mistake #5 — Waiting Too Long to Prepare for Homeownership

Mortgage rates remain a central concern for first-time homebuyers: after a period of volatility, rates have hovered around the mid-6% range, which significantly affects monthly costs and qualifying requirements.

Problem:

Assuming homeownership is “years away” often leads borrowers to delay credit strengthening efforts — and then face higher costs or limited options when they’re ready.

How Langley helps:

Langley’s First-Time Homebuyer Program supports young members with early readiness — from mapping credit readiness to identifying savings and qualifying strategies tailored to your situation.

Learn more about our First-Time Homebuyer Program.

What First-Time Borrowers Who Do It Right Focus On

Successful first-time borrowers don’t just borrow — they plan:

1. They understand cost vs. payment tradeoffs
2. They borrow only when it fits their broader financial picture
3. They leverage tools that reinforce positive behavior
4. They choose partners who help them make decisions that hold up five years later

Credit isn’t a short-term decision — it’s a long-term foundation.

The Langley Difference

Large institutions often focus on scale and product push. Langley, as a member-owned credit union, focuses on member outcomes — which changes how we design solutions:

1. Competitive, transparent credit card terms that support responsible use
2. Auto financing that looks at total cost, not just monthly payment
3. Student loan options tied to future goals
4. Homebuying guidance that starts long before your offer gets accepted

This isn’t generic advice — it’s how we help members succeed in real life.

Key Takeaways